McDonald’s Poised to Retain Both Seats in Proxy Fight With Carl Icahn

McDonald’s Corp.

MCD 2.74%

People familiar with the matter say they are poised to win a proxy battle with activist Carl Icahn, who has challenged the fast food chain over suppliers’ handling of pregnant pigs.

Early election ballots show McDonald’s ahead of Mr. Icahn,

who nominated two directors to the company’s board, the people said. Votes will continue to be put in place until the end of McDonald’s shareholder meeting on Thursday morning and are still moveable, though unlikely to change the outcome, they said.

Mr. Icahn’s animal rights campaign was seen as a long shot from the start, as it was a far cry from his typical activist fight. It offered no clear financial benefit to McDonald’s shareholders, and he had a small stake in McDonald’s, which meant he needed to convince a larger-than-usual share of shareholders to support the company’s goals. me.

Mr. Icahn can see the campaign as a victory in part because it raised awareness of the issue he first joined 10 years ago at the behest of his daughter and the Humane Society of the United States.

At the heart of the conflict is the use of so-called pregnancy pens by McDonald’s suppliers, small cages used to house pregnant pigs. Suppliers say the crates make livestock more efficient, while Mr Icahn and his nominees say they are inhumane.

In 2012, McDonald’s pledged to stop buying pork by 2022 from producers using crates. Few people know that Mr. Icahn has been quietly pushing for changes behind the scenes.

This year, Mr. Icahn argued that McDonald’s had failed to comply and changed the interpretation of the commitment. McDonald’s now typically requires producers to move pigs out of the container only after confirming that they are pregnant, with many waiting to do so until the sow is 4 to 6 weeks pregnant at 16 week.

Mr. Icahn had hoped the use of crates would be banned altogether.

McDonald’s has said that more than 60% of its American pork comes from pigs that weren’t raised in pregnancy crates after they were confirmed pregnant, and they expected that number to be 85%. to 90% by the end of this year.

The company said Mr Icahn’s demand was not viable as it would significantly increase costs and create a financial burden for customers.

Mr. Icahn has been trying to get the big index funds to focus on socially conscious investing, whose backing is crucial in most proxy wars. He believes that despite being at the forefront of the investment movement in the environment, society and governance, BlackRock Inc.

and others have subjectively chosen the principles they care about and paid little attention to animal welfare.

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Appears on 25 May 2022, print edition as ‘Icahn set to lose chain authorization bid.’

https://www.wsj.com/articles/mcdonald-s-poised-to-retain-both-seats-in-proxy-fight-with-carl-icahn-11653434141?mod=rss_markets_main McDonald’s Poised to Retain Both Seats in Proxy Fight With Carl Icahn

Edmund DeMarche

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